Alabama: Sales Tax Handbook

Alabama:

Are Manufacturing and Machinery subject to sales tax?

While Alabama's sales tax generally applies to most transactions, certain items have special treatment in many states when it comes to sales taxes. This page describes the taxability of manufacturing and machinery in Alabama, including machinery, raw materials and utilities & fuel. To learn more, see a full list of taxable and tax-exempt items in Alabama.

Machinery

TAXABLE

In the state of Alabama, they are taxed at a reduced rate.

Raw Materials

EXEMPT

In the state of Alabama, the materials which are not utilized as an ingredient or component of a manufactured tangible personal property which will be put up for sale are considered to be taxable.

Utilities & Fuel

TAXABLE

In the state of Alabama, any sort of food residue, coke, or coal which has been sold to manufacturers, or has been stored by manufacturers, is considered to be exempt.

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